The Prudential Series Fund

securities—in order to take advantage of new investment opportunities or return differentials. Each Portfolio’s turnover rate may be
higher than that of other mutual funds due to the Subadviser’s investment strategies.
In addition, certain Portfolios may be used in connection with certain living benefit programs, including, without limitation, certain
“guaranteed minimum accumulation benefit” programs and certain “guaranteed minimum withdrawal benefit” programs. In order for
Prudential to manage the guarantees offered in connection with these benefit programs, Prudential generally: (i) limits the number
and types of variable sub-accounts in which contract holders may allocate their account values and (ii) requires contract holders to
participate in certain specialized asset transfer programs. The use of these asset transfers may, however, result in large-scale asset
flows into and out of the relevant Portfolios. This is particularly true for th Target Maturity Portfolios and the AST Investment Grade
Bond Portfolio. Such asset transfers could adversely affect a Portfolio’s investment performance by requiring the relevant Subadviser
to purchase and sell securities at inopportune times and by otherwise limiting the ability of the relevant Subadviser to fully implement
the Portfolio’s investment strategies. In addition, these asset transfers may result in relatively small asset bases and relatively high
transaction costs and operating expense ratios for a Portfolio compared to other similar funds.
Prepayment or call risk. Prepayment or call risk is the risk that issuers will prepay fixed-rate obligations held by a Portfolio when
interest rates fall, forcing the Portfolio to reinvest in obligations with lower interest rates than the original obligations. Mortgagerelated
securities and asset-backed securities are particularly subject to prepayment risk.
Real estate risk. Certain Portfolios may invest in REITs and real estate-linked derivative instruments. Such on emphasis on these types
of investments will subject a Portfolio to risks similar to those associated with direct ownership of real estate, including losses from
casualty or condemnation, and changes in local and general economic conditions, supply and demand, interest rates, zoning laws,
regulatory limitations on rents, property taxes, and operating expenses. An investment in a real estate-linked derivative instrument
that is linked to the value of a REIT is subject to additional risks, such as poor performance by the manager of the REIT, adverse
changes to the tax laws, or failure by the REIT to qualify for tax-free pass-through of income under the Internal Revenue Code of
1986. In addition, some REITs have limited diversification because they invest in a limited number of properties, a narrow geographic
area, or a single type of property.
Selection risk. The risk that the securities, derivatives, and other instruments selected by a Portfolio’s Subadviser will underperform
the market, the relevant indices or other funds with similar investment objectives and investment strategies, or that securities sold
short will experience positive price performance.
Short sale risk. A Portfolio that enters into short sales, which involves selling a security it does not own in anticipation that the
security’s price will decline, exposes the Portfolio to the risk that it will be required to buy the security sold short (also known as
“covering” the short position) at a time when the security has appreciated in value, thus resulting in a loss to the Portfolio.
Theoretically, the amount of these losses can be unlimited, although for fixed-income securities an interest rate of 0% forms an
effective limit on how high a securities’ price would be expected to rise. Although certain Portfolios may try to reduce risk by holding
both long and short positions at the same time, it is possible that a Portfolio’s securities held long will decline in value at the same
time that the value of the Portfolio’s securities sold short increases, thereby increasing the potential for loss.
Small company risk. The shares of small companies tend to trade less frequently than those of larger, more established companies,
which can have an adverse effect on the pricing of these securities and on a Portfolio’s ability to sell these securities. Such
investments may be more volatile than investments in larger companies, as smaller companies generally experience higher growth
and failure rates. The securities of smaller companies may be less liquid than others, which may make it difficult to sell a security at a
time or price desired. Changes in the demand for these securities generally have a disproportionate effect on their market price,
tending to make prices rise more in response to buying demand and fall more in response to selling pressure. In the case of small cap
technology companies, the risks associated with technology company stocks, which tend to be more volatile than other sectors, are
magnified.
U.S. government and agency securities risk. In addition to market risk, interest rate risk and credit risk, such securities may limit a
Portfolio’s potential for capital appreciation. Not all U.S. Government securities are insured or guaranteed by the U.S. Government,
some are only insured or guaranteed by the issuing agency, which must rely on its own resources to repay the debt. Mortgage-backed
securities issued by government sponsored enterprises such as Freddie Mac or Fannie Mae are not backed by the full faith and credit
of the United States.
Other debt obligations issued or guaranteed by the U.S. government and government-related entities risk. Securities issued by
agencies of the U.S. Government or instrumentalities of the U.S. Government, including those which are guaranteed by Federal
agencies or instrumentalities, may or may not be backed by the full faith and credit of the United States. Obligations of the GNMA,
the Farmers Home Administration, the Export-Import Bank, and the Small Business Administration are backed by the full faith and
credit of the United States. Obligations of the FNMA, the FHLMC, the Federal Home Loan Bank, the Tennessee Valley Authority and
the United States Postal Service are not backed by the full faith and credit of the U.S. Government. In the case of securities not
backed by the full faith and credit of the United States, a Portfolio generally must look principally to the agency issuing or
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